Fusion Finance Limited's Working Committee has approved a significant debenture allotment worth ₹160 crores. The company, formerly known as Fusion Micro Finance Limited, conducted a meeting to deliberate on this private placement initiative.

Debenture Allotment Details

The Working Committee approved the allotment of 16,000 secured, rated, listed, redeemable, transferable, non-convertible debentures through private placement. Each debenture carries a face value of ₹1,00,000, collectively aggregating to ₹160,00,00,000.

Interest and Maturity Structure

The debentures offer a coupon rate of 10.95% per annum with a structured payment schedule. The tenure of the debentures is set at 3 years.

Security and Charge Structure

The debentures are secured by a comprehensive charge mechanism to protect investor interests. The outstanding principal amount is secured by a first ranking and exclusive charge of 1.10x over the company's receivables, including present and future receivables that are free from any encumbrances, charges, or liens.

Regulatory Compliance

The allotment was conducted in accordance with Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This ensures complete regulatory compliance and transparency in the debenture issuance process.

Fusion Finance has announced its intention to hold a board meeting on December 16th to discuss fundraising through Non-Convertible Debentures (NCDs). This scheduled meeting represents a significant step in the company's capital raising strategy.

Board Meeting Details

The microfinance company has set December 16th as the date for its board meeting, where directors will deliberate on the proposed NCD fundraising initiative. The meeting will focus specifically on evaluating the feasibility and structure of raising capital through debt instruments.

NCD Fundraising Strategy

Non-Convertible Debentures represent a debt instrument that allows companies to raise capital from investors while offering fixed returns. For Fusion Finance, this fundraising method could provide access to additional capital without diluting existing equity holdings.

The decision to explore NCD-based fundraising reflects the company's strategic approach to capital management. This debt instrument typically offers investors predetermined interest rates and repayment schedules, making it an attractive option for both issuers and investors seeking stable returns.

Strategic Implications

The planned discussion indicates Fusion Finance's proactive approach to securing additional funding for its microfinance operations. NCDs can serve as an effective tool for companies looking to expand their capital base while maintaining operational flexibility.

The December 16th board meeting will likely address key aspects of the proposed NCD issuance, including potential size, tenure, and interest rate structure. These deliberations will help determine the viability and timing of the fundraising initiative.